Product Description

Night trading: the impact on technical charts
by Heidi Schmidt

The new night trading session at the Chicago Board of Trade (CBOT) is causing worry among
technical chartists. Should technical analysts adopt the new child at first sight and incorporate the data
into their painstakingly kept charts and indicators? What if the session is declared a flop and halted —
will pristine charts be forever blemished?

Chartists have two choices: incorporate the new session into the daily trading range and merely continue
their current charts or keep two sets of charts until the success/impact of the new night session is better
understood (Figure 1). The following examination of the new night session may help clarify which path
is best to take.

Beginning on April 30, 1987, T-bond and T-note futures and options started to trade during a night
session running from 6 p.m. to 9 p.m. Central time. CBOT defines the daily trading session as starting
with the previous night's session. The last trade if the night session is termed the "suspension" of trading.

The next morning, the "resumption" of trading occurs with the usual trading hours, 8 a.m. to 2 p.m.
Central time, and finishes the session. The day's close is still calculated at 2 p.m., but the daily high and
low take into account the previous evening's activity. Originally, there was no night trading conducted on
Sunday evenings, and Monday had no night trading incorporated into its trading ranges. However, based
on the initial success of the night sessions, Commodity Futures Trading Commission approved Sunday
night sessions beginning on September 13, 1987.

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